A recent report from BMO Economics and Harris Private Bank reveals existing home sales in the United States climbed 5 percent in December on a year-over-year basis.

The number of existing home sales reached 4.61 million units annualized, which was slightly below expectations but still a positive indicator that more homebuyers may take part in the activity.

"The combined effects of record-low mortgage rates, near record-high affordability, a more promising economic recovery, job creation and low prices are beckoning home buyers out of the woodwork," said Doug Porter, deputy chief economist for BMO Economics.

For 2011 as a whole, existing home sales rose 2.5 percent to 4.29 million units, which erased a decline of 3.4 percent in 2010.

Low mortgage rates could lead some potential homebuyers to taking to the market, but stricter lending practices could also prevent them from obtaining a loan. The Mortgage Bankers Association's Weekly Mortgage Applications Survey found a 5 percent decline in application volume for the week ending January 20.

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